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Why I don't do automated trading
First of all, I am not anti-automated trading. With how frequently the behaviour of the markets changes, I do believe that it’s probably a tough nut to crack. But as I keep saying on Twitter (with respect to trading combines), “challenging is not impossible”.
Over the years I have come across a handful of traders who I know do successfully trade using an automated (or even semi-automated) approach.
This newsletter is in response to the many questions that I’ve had about why I haven’t automated the way I trade.
Granted it’s a nice idea… putting myself into a bot, then sitting back sipping pina coladas on a beach. However, I’m afraid to say, the “Emma Bot” isn’t going to happen anytime soon.
The following is a list of reasons why I cannot automate the way I trade. It’s been good writing this as I feel it sheds some more light on what I do.
1) Most prop firms will not allow automated trading
As someone who spreads their risk and trades with multiple prop shops, this would be a big problem. In their rules, they’re very clear that automated trading is not permitted. If a firm found out that I was using a bot to trade, they would take away my accounts, along with all the money I had made in them.
I’m not really sure how they would figure this out. But even so, bearing in mind on some accounts, it’s a full 30 trading days before I can request a payout, it’s not something I’m particularly keen to test.
2) There is no systematic rule to how I add-on
Aggressively scaling into a position is probably the fastest way to blow out an account. For me to do this successfully, I need to feel the heartbeat of the market. If I can feel hesitation or indecision in how the bar is forming, I will not add on.
It’s only when I can feel the market is really running, I will click the shit out of my mouse. If the market is not moving as well, I may not add on at all, or only add on when it pulls back. How I add-on is too discretionary to code into fixed rules.
This can probably be mitigated by using NQ instead of MNQ. Sometimes I will trade NQ instead of MNQ, but when I do this depends on many factors:
If it’s a new account
If the account is out of it’s trailing drawdown
(For some prop firms), if the account is older than 3 months old (and I can now take out as much as I want)
How tired I feel (trading with add-ons is more difficult, it requires a more focused mind)
If I expect the market will be fucky (e.g. waiting on FOMC/other news, holidays, end of the month, end of the quarter, etc)
3) I don’t trade fixed setups
Although I have a handful of setups that I trade, the trades I take are not always textbook perfect.
My trading style has evolved to look for clues as to which way we’re going to go. The more clues I see (absorption, trapped trader bar, declining delta, divergent price action) the more confidence I have in taking a trade.
However sometimes, the order flow can be completely whack, and the market will do the complete opposite, even with no news.
If I get stopped out multiple times trying to go long, I will ignore what the order flow is telling me (and stop trying to catch the falling knife), and short it instead.
4) Setups can get whacky during the news
One could mitigate this by turning off their bot during high-impact news events. However, if I have dug a hole, I will absolutely trade the news to get me back to green.
This doesn’t happen often, but it is my insurance policy if I fkup. It’s a last-ditch attempt to get back to green before I write off the day as a loss.
5) It would be such a killjoy
Even if I could make an “Emma Bot” work, it would make my trading incredibly dull and boring. It would rob me of so much joy.
Whilst I do trade for the money, I feel very blessed that this skill has evolved into something that I really enjoy. I’ve done many different things over the years. Right now I really am at the happiest, and most settled, that I’ve ever been trading.
Trading is not always easy, but paradoxically, that’s what I love about it. When I get to the end of the month and see what I’ve achieved, it genuinely gives me a huge sense of accomplishment. I still sometimes cannot believe that I can make money by “clicking buttons”, all at the right time of course.
I accept that automated trading systems have their place and they no-doubt work for some. For me and how I trade, it’s not that dissimilar to how I drive. And I deplore the idea of self-driving cars!! I’m the kind of woman who wants to jump in through the window and put the pedal to the metal! 😁
What you DON'T need to be successful
Earlier this week, I started writing this for fun. It’s a look over all the things that I thought were necessary to become a successful trader.
The following is based on my own personal experiences. For some, the following may be necessary and that’s cool. This is a list of things which haven’t been necessary for me, and the way that I trade:
Multiple monitors
Seriously, one average-sized monitor is more than ample for my needs now.
Trade 101 different markets
I primarily just trade MNQ/NQ now. Occasionally I’ll also trade ES when I want to punish myself 🤣 ES is something that I want to love but it keeps pushing me away 🥺
Trading all-day
You can if you want to. It’s just not necessary. Right now I’ve got a lot going on in my personal life, I typically get done within the first 30 minutes of the open.
The moon and the stars to align
I used to wait hours for the more perfect setups. I later learned there are many trading opportunities and it’s ok to bend the rules slightly, as long as I manage risk.
Order flow
Although I rely on it now, you don’t in fact need it. I successfully traded many years without it. For many years all I looked at were candlestick charts.
A top-of-the-range computer
Yes, it needs to be a minimum spec and not be too old, but you don’t need to spend $5,000+ on it either.
A lot of money
Now that micros (and of course trading combines) are a thing, you can get started with a relatively small outlay. Back when I started, I was told to forget trading the E-Mini unless I could put $10,000 into an account.
To be a rocket scientist
Some believe being too smart can go against us, because it can cause us to overthink and be too analytical. I’ve heard of several people who used to work day jobs as cleaners who started trading (and now trade full-time).
Give up your day job
I continued to work for a bit whilst I learned how to trade. I’m aware of many others who have done the same. If they couldn’t be around the trade the open, they would trade the close instead.
X trading platform
I’ve lost count of the number of arguments that I’ve seen about Sierra Chart vs Ninja Trader. They both have their limitations and I’m not going to get into that here.
The best trading platform is the one that works best for you, and your style of trading.
I can’t argue that the DOM on Ninja Trader leaves much to be desired. It also appears to lack the more advanced order flow tools.
However, it really does depend on how you want to trade. More is not always better.
For how I want to trade (a simplified order flow system), Ninja Trader has been more than ample for my needs.
I have made many thousands of dollars using it, so it evidently is more than up to the job.
Some of it can be largely user preference too. Some prefer more control over config, some prefer less. The best platform is the one that’s right for you.
I also know of a few people who run Ninja, Sierra & MotiveWave but I don’t speak to them anymore, I can’t handle that level of crazy 😂
Lastly, I recently started reading
’s substack. I’ve learned quite a few things already and he’s genuinely funny AF 👌 😂. He’s already tackled a lot of ‘dense’ subjects in a very easy-to-understand and digestible manner.A recommended follow 👍
Cheatsheet
N.B. The following whilst still helpful, is slightly out of date. I am working on updating this. Please my tweets on Twitter which show the newer chart layout that I’m using.
Here you go guys, my cheatsheet. There’s no space to cover the chart setup, please see details below:
40 Range Chart (my execution chart)
- 5 EMAs (8, 20, 50, 100 and 200)
- kissorderflow.com (Trapped Trader bars turned on: Max 6, Min 20)
15 min (my Big Picture chart)
- Day 1-5 VWAPS plus Weekly and Monthly VWAP
- Session high and low levels are enough for me, but you can go crazy
Delta Drop Setup
I’ll share what I’m using. I wouldn’t get too hung up on seeing the exact data. Small differences in delta largely do not matter. The same patterns will still be there.
nobstools.com/delta - For Swing Delta
kissorderflow.com - Simplified order flow bars that show me:
Absorption
Trapped Traders
Buy or Sell surges
ninjatrader.com - Platform
I will never send you a message trying to sell you something, whether that’s mentoring, “holy grail” indicators and/or trading systems, or anything else like that. If you get a message from ‘me’ that’s asking for money, that WON’T BE ME. Please block and report these mofos.
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Not trade advice! Please see about page for financial disclosure.
You didn’t put the best picture of me but appreciate 😂❤️ likewise, I appreciate your content even though I wouldn’t give that much information on my trading as you do. Community is lucky to have you. Cheers 🍻 happy 4th!
Spot on as always Emma. It’s funny that when I was being trained on that Pull Back setup like you started with, I had issues with entering 1 tick above/below the setup bar. So I made a automated entry study in Sierra Chart to help me. Then I automated it further by adding more filters such as the degree angle of the 8ema among other things. It wasn’t a fully automated system because over time it would lose money but it became a training tool for observing what Matt taught me about price action. Then it transformed into a discretionary semi automated trading system that was profitable over time because I got good enough in observing the market that I became the filter. Now (99% of time) I use intuitive manual market entries based on observing price action and I’m doing it on a 15 second chart to boot. Love the challenge! F- in crazy. So glad I stumbled upon your twitter feed a few years ago. Thank you for all you do. When you get fed up with LeeLoo try APEX. MUCH better all around imo.